Update From Washington

Statement

Congress was back in full session this week and began work on a number of urgent issues, including trade legislation, and negotiations to avoid the "fiscal cliff'.

The House voted to make American goods and services more competitive on the world market by normalizing trade with Russia. When Russia joined the World Trade Organization in August, 2012, it was the largest economy not currently in the WTO. By joining, Russia must abide by global free trade rules and lower tariffs and other barriers to trade in its market.

This has allowed countries around the world to sell goods to the growing Russian market. However, because of our own laws, the United States has not benefited from free trade with Russia. Our vote this week establishes Permanent Normal Trade Relations with Moldova and Russia and gives the United States remedies to address trade disputes at the World Trade Organization that we had previously forfeited. This bill also contained a number of trade enforcement measures to ensure that US companies aren't placed at a competitive disadvantage or harmed by unfair trade practices from Russia.

Next week the House will not be in session because of the Thanksgiving Holiday. When we return, urgent action is needed to avoid the "fiscal cliff'. As we've discussed in this newsletter, without action from the President and Congress, tax rates will skyrocket at the beginning of next year, and sequestration cuts will kick in that could cause dramatic harm to our national defense.

Negotiations between Speaker Boehner and the President have started, and the contours of the negotiations are beginning to emerge. It's clear that the President and policy makers in his party are wedded to economically-dangerous tax rate increases that do nothing to address our structural weaknesses as a country.

The President has demanded that taxes rise on those making $250,000 or more annually. As we've discussed, this would hit many individuals who file their businesses' taxes as individuals. With the economy in a weakened state, these tax increases could push it into another recession.

House Republicans know that we can't get out of our fiscal perils merely by raising taxes. This wouldn't get us anywhere near long-term fiscal stability. What we need are deep reforms to our entitlement programs, and a simpler, fairer tax code.

We can bring in new revenues to cut the deficit without raising rates. House Republicans, and other policy makers have advanced solutions that would patch up our flawed tax code, and close loopholes to raise tax revenue. This solution would bring us closer to a balanced budget without putting in place higher tax rates that will stifle economic growth.

With such a clear solution, you'd think common ground would be easy to find with the President and his allies in Congress. Unfortunately, they seem to prefer irresponsible brinksmanship. Many Senate Democrats have said they would prefer to go over the fiscal cliff -- and plunge us into deep recession -- than compromise on their demands to raise taxes.

This is the height of irresponsibility, and it shows that some Democrats have an agenda that goes beyond solving our fiscal problems. If tax increases, and not a balanced budget are their ultimate goal, it is clear that they want bigger, more activist government, and are using our current crises to accomplish their ends. There is room for negotiation to avoid the fiscal cliff, but not if Democrats refuse to accept the fundamental truth that we spend too much, and that our entitlement programs aren't sustainable over the long term.

I will keep you updated as these negotiations continue. In the meantime, I hope you and your families have a wonderful and peaceful Thanksgiving.Sincerely,